The dark energy paradox leads to a new structure of spacetime.pptx
Market potential for sweetpotato seed in Africa
1. THE MARKET POTENTIAL FOR
SWEETPOTATO PRE-BASIC AND
BASIC SEED IN EASTERN AND
SOUTHERN AFRICA
S. Rajendran, L.N. Kimenye & M. McEwan
10th Triennial Conference of the African
Potato Association
Addis Ababa, Ethiopia, 9-14th October, 2016
2. Structure of Presentation
Part 1
Why do we need business plans for Sweetpotato Early Generation
Seed (EGS) – Justification, Background of the business plan
Part 2
• Key financial findings and Challenges
Part 3
• 10 Key messages
3. BUSINESS PLAN
WHAT
• Management tool for the NARIs
& potential investors to make
decisions on their investment
• The business model - an
objective document that aims to
present a through analysis of an
enterprise’s concept, so as to
evaluate the viability of the
concept.
• The business plan- more
elaborate document that
comprises all the information,
calculations, and analyses that
demonstrate the business’
viability.
WHY
• To plan a new venture or
expand the business in
future.
• To understand the market
situation.
• To determine which
strategies to adopt, when.
HOW
• Financial analysis -
investment required;
expenses, revenue, return
on investment – to keep
business operational
• Marketing projections –
forecasting demand
• Promotion & marketing
strategies
4. Why do we need business
plans for sweetpotato Early
Generation Seed (EGS)?
5. TO HAVE VIABLE EGS ENTERPRISES WHICH MEET RECURRENT COSTS
BUSINESS PLAN
6. Justification of the study
• Sweetpotato is a major food crop in eastern and southern Africa
• Poor yield: lack of timely availability and access to quality seed is
a contributory factor.
• NARIs have the mandate for early generation seed production
but unreliable funding streams to achieve their mandate.
• Many NARIs are shifting towards a business orientation to
compensate for reductions in government spending.
Source: Kimenye et al 2016
7. Background
• NARIs in 11 SSA countries are expanding their pre-basic
sweetpotato seed production.
• 10 institutions have started to implement their business plans;
of which six institutions earned revenue from the sale of seed,
to start their revolving funds.
• A cross country synthesis was prepared – lessons & challenges in
developing business plans
• SWOT analysis conducted to identify strategies for exploiting
opportunities, and for mitigating weaknesses to reduce
vulnerability to threats in the business environment.
8. Financial Analysis
Preliminary study period: Sept 2015-Jan 2016
Products: pre-basic and basic seed
Cost structure: tissue culture and screenhouse
for pre-basic seed; open field for basic seed.
Type of costs: variable costs, materials and
consumables and fixed costs
• Financial tools: NPV, IRR, Gross Margin
• Key financial findings & challenges
9. Gross Margin Analysis
• Gross margin is a measure of the return
after deducting variable (or operational)
costs.
• Net margins are the returns after
deducting total costs (variable and the
appropriate fixed cots).
15. Positive side Negative side
Strengths Weaknesses
• Monopoly
• Mandatory
• Resource availability
• Low efficiency resource use –
high cost of micro-
propagation – TC
• Low motivation – Low labour
productivity
Opportunities Threats
• Growing market
• Existence of decentralized
multipliers (DVMs) with
access to better infrastructure
(net tunnels)
• Culture of not buying vines by
subsistence farmers
• High perishability and
bulkiness of the product
• Unpredictable demand from
farmers
16. SO Strategies: Pursue opportunities
that are a good fit to the NARI’s
strengths
WO Strategies: Overcome
weaknesses to be able to pursue
opportunities
• Brand the product
• Engage in promotion campaigns
• Harness synergies with other crops
- potential economies of scale
• Cost reduction through innovative
approaches.
• Optimal resource use efficiency
ST Strategies: Identify ways that an
institution can use its strengths to
reduce vulnerability to threats
WT Strategies: Establish a
defensive plan to prevent the
institution’s weakness from making
it highly susceptible to external
threats
• Stakeholder meetings – seed
demand
• Explore use of appropriate ICT
platforms
• Collaborate with partners to raise
awareness.
• Explore mechanisms for revolving
fund
18. Key Messages
1. There is a market for early generation sweetpotato seed, which is
currently not met
2. A business orientation is both necessary and possible for NARIs
3. The business is either one or a combination of two products: pre-
basic and basic seed
4. NARIs should estimate and coordinate seed supply requirements
5. It is critical to understand actual and potential customers
6. Pricing strategy required
19. 7. NARIs should optimize their business environment – they often
have a monopoly and comparative advantage in expertise
8. The future market for pre-basic seed might be competitive as
seed laws will be liberalized
9. To maximize profits, it is necessary to reduce costs and
minimize inefficient production practices. Tissue culture production
is expensive.
10. Public Private Partnership (PPP) opportunities
20. Challenges
• Address challenges identified in first round
of business plans
• Recall method for cost data collection: lack of
accuracy
• Key assumptions were not specified/clear